Understanding Timeframe In Cryptocurrency Trading

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Gooday family,

How are you all doing today, I believe we are all active in the community and also on other social media platform promoting steemit.

I am here today for us to learn about timeframe in crypto trading.

For those that are very much familiar with technical analysis, they would easily understand what time frame is all about in the cryptospace.

Nonetheless, for the sake of those that have little knowledge on this topic, we will be learning together what timeframe is all about.

WHAT IS TIMEFRAME IN CRYPTO TRADING

In crypto trading, timeframe can be understood to be a specific time range in which market data and price are analyzed and trading decisions are made.

This timeframe can vary from seconds, to minutes, to hours, to days, to weeks, to months and to years.
And each of this time period has a unique data it gives about the cryptomarket.

SIGNIFICANCE OF TIMEFRAME IN CRYPTO TRADING

Gaining an understanding on the significance of timeframe can be very important for crypto traders.

As time frames helps to give more insight on the happenings in the market

Listed and explained below are some significance of timeframe in crypto trading.

• Price Analysis:

With the use of timeframes, crypto traders are allowed to perform price analysis at different levels.

The shorter time frames gives information on the activities in the market as at when the analysis is being made, while the higher time frame on the other hand helps in trend identification.

It is with the analysis from the higher timeframe that one can understand the trend in the market.

• Trend Identification:

Just as I have explained earlier, timeframes helps in the identification and confirmation of market trends.

The shorter time frames helps in the Identification of shorter trends while the longer time frame identifies a longer term trend, and in most cases the overall market trends.

The higher timeframe trends helps in making investment decisions in the market.

• Risk Management:

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Time frames in crypto trading is very important for risks management.

With the use of time frame, traders can be guided to set stop loss and take profit easily, thus minimizing loss and maximizing profit.

With timeframe analysis, traders can decide to visit a lower time frame to search for entry positions, and this is usually so because, a lower time frame gives a trader a higher risk to reward ratio.

Using an higher time for entries in the market does not mitigate risks as well as the lower time frame.

• Strategy Development:

There are different trading strategy and each of this strategy has a particular timeframe in which it works properly.

Using swing trading for example, swing trading analysis is best done on a higher time frame, probably weeks or even months.

Day trading as the name implies is a type of trading whose analysis is done within the day.

While scalping is a type of trade that is done within seconds and minutes.

Conclusion

We have learnt about timeframe in cryptocurrency trading and we have also discussed on its significance and various sectors it can be used.

As we continue our discussion, we shall learn more on timeframe in crypto trading